California Embraces Smaller Solar Scheme

California has a long list of huge solar power projects in the pipeline that will produce hundreds of megawatts apiece to help the state’s three major investor-owned utilities reach an aggressive renewable portfolios standard, but these complex projects take a long time to build and come freighted with hefty transmission costs. So now the state Public Utilities Commission is moving to spur small and mid-sized solar development – projects up to 20 megawatts (MWs) in capacity – that could feed the utilities’ needs quickly and at the lowest possible cost to ratepayers.

Here’s the plan just approved by the commission: PG&E, Southern California Edison and San Diego Gas & Electric will hold biannual auctions into which solar developers can bid. Utilities must award contracts starting with the lowest cost viable project and moving up in price until the megawatt requirement is reached for that round. The two-year pilot program established for this “Renewable Auction Mechanism” (RAM) would add 1 gigawatt of fresh solar power to the utilities’ totals, enough to power around 750,000 homes.

Solar panels, solar power plant, PG&E

image via PG&E

In its decision, the PUC said RAM “will promote competition and elicit the lowest costs for ratepayers, encourage the development of resources that can utilize existing transmission and distribution infrastructure, and contribute to RPS goals in the near term.”

That’s a view echoed by activists and small to mid-sized solar developers. In a Vote Solar press release, Sara Birmingham of the Solar Alliance applauded RAM, saying it will “open up a significant market potential in California for simplified renewable energy procurement.” And on its blog, Vote Solar said RAM would lead to development of solar resources that could be incorporated into existing utility distribution infrastructure and be easier to finance, all the while avoiding the problems some governments have had – Spain, most notably – with feed-in tariff programs that attempt to encourage solar development by fixing a price for the power.

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Pete Danko is a writer and editor based in Portland, Oregon. His work has appeared in Breaking Energy, National Geographic's Energy Blog, The New York Times, San Francisco Chronicle and elsewhere.